How FIEs may sustain competitive advantage in China: Adapting marketing strategy by the use of Guanxi

Abstract

Purpose

The purpose of this paper is to show that the Guanxi characteristics in Chinese business culture may add to the understanding of foreign invested enterprise's (FIE) successful marketing in China.

Design/methodology/approach

The authors surveyed the entry mode of 296 FIEs in China and examined their way of adapting marketing strategy to local culture. The authors used a conceptual model hypothesizing a system of variables that the authors subsequently tested using structural equation modeling.

Findings

Market orientation was insufficient to obtain marketing capability in China. FIE marketing capability in China was dependent on Guanxi and learning orientation, showing the need for contextualization of marketing approaches.

Research limitations/implications

This paper enriches previous research on marketing and makes a contribution to the existing literature on practical management in China. It is also relevant for marketing in other markets in transition.

Practical implications

FIEs may develop these capabilities on their own or succeed trough partnering in China. The study also points at similar mechanisms in other emerging markets and economies in transition from previous socialist economies.

Originality/value

The authors attempt to explore the main factors driving the marketing capabilities of FIEs in China. Few articles have shown how foreign companies may adopt Guanxi orientation to do this, which is the object of the present study.

Citation

Yuan, X., Kim, S., Dai, W. and Ketil Arnulf, J. (2014), "How FIEs may sustain competitive advantage in China: Adapting marketing strategy by the use of Guanxi", Baltic Journal of Management, Vol. 9 No. 1, pp. 22-46. https://doi.org/10.1108/BJM-04-2013-0076